Social Security Agreement between Australia and Spain - Frequently Asked Questions
Note: the following information is provided as a guide only. People should contact Centrelink International Services on 131 673 for specific information relating to their circumstances.
- When did the Agreement start?
- What does the Agreement say?
- What does the Agreement do?
- What payments does the Agreement cover?
- What are the main features of the Agreement?
- Where and how are claims made?
- When does payment start?
- How are Agreement pensions and benefits paid?
- What documents do I need To make a claim?
- What are the important things to know about the Australian social security system?
- Examples for residents of Australia
- Examples for residents of Spain
- How do I find out more?
The Agreement started on 3 June 1991.
The Agreement is a formal treaty. See the Social Security Agreement between Australia and Spain.
The main purpose of the Agreement is to assist people who move between Australia and Spain to get a pension from each country so that both Australia and Spain share the long-term social security coverage for that person. The Agreement:
- Provides for the grant of pension by one country even though a person is living in the other;
- Allows for the transfer of pensions between countries; and
- Allows people to add together periods of working life residence in Australia and periods of contributions in Spain to meet qualifying periods to obtain a pension from one or both countries.
The social security payments covered by the Agreement are as follows:
- Age Pension;
- Disability Support Pension (previously invalid pension);
- Wife Pension (no new grants since 30 June 1995);
- Carer Payment (previously carers' pension); and
- pensions payable to widows
- Bereavement Allowance
- Widow B Pension (no new grants since 20 March 1997)
- Parenting Payment (single) (previously sole parent pension)
- benefits for temporary incapacity for work in cases of common illness, maternity or non-industrial accident;
- invalidity benefit;
- old age benefit;
- death and survivors' benefits; and
- unemployment benefit.
To qualify for an Australian pension a person needs to have a minimum period of residence in Australia. For example, a person needs to have 10 years Australian residence to claim an Australian Age Pension. Australian legislation also requires a person to be an Australian resident and in Australia to claim a pension.
Under the Agreement, Spanish insurance periods (periods of contributions) are treated by Australia as periods of residence in Australia. The Agreement also permits a person who resides in Spain to claim a pension from Australia even though he or she may no longer be an Australian resident.
Spanish legislation requires minimum insurance periods to qualify for benefits. Under the Agreement, periods of working life residence in Australia are treated as insurance periods in Spain.
These deemed periods do not affect the amount of pension which is based only on the relevant periods in each country.
People living in Australia can lodge claims for Spanish and Australian pensions with any Centrelink Customer Service Centre. Centrelink will supply all the necessary claim forms.
People living in Spain can lodge claims for Australian and Spanish benefits with their local office of the Spanish Instituto Nacional de Seguridad Social (INSS).
In Australia's case, this is from the first day a person qualifies for payment after lodgement of a claim. Claims for Age Pension may be lodged up to 3 months in advance of reaching Age Pension age. If a person lodges their claim after they reach Age Pension age, then payment would generally not be backdated.
When You Live in Australia
Australian pensions are paid by the Department of Human Services. Payments are made into a person's nominated bank account every 2 weeks.
Spain pays its own pensions and benefits through the Instituto Nacional de Seguridad Social (INSS).
People who get a pension from both countries, will get two separate payments – one from Australia and one from Spain.
Temporarily Absent From Australia
People who get an Australian pension, and travel to Spain, or another country, for less than 12 months, will continue to have their pension paid into their nominated bank account in Australia every 2 weeks subject to ongoing qualification.
Permanently Absent From Australia
People who get an Australian pension, and leave Australia permanently, or for more than 12 months, will be paid their pension into their nominated bank account every 4 weeks. Payments made to customers in Spain are in Euros.
To make a claim a person needs to complete a claim form and provide documents to show identity, date of birth, marriage etc. The most helpful documents are:
- birth certificates and passports (including expired and foreign passports) and naturalisation/citizenship papers;
- marriage certificate(s);
- birth certificates for any dependent children;
- death certificates or divorce papers if applicable;
- any documents proving periods of residence in Australia;
- any documents proving periods of contribution and/or residence in Spain;
- any documents which could be useful, for example, bank statements, proof of rent or home ownership, Taxation Notice of Assessment.
All claimants for Australian Agreement pensions need to meet the other conditions (e.g. age limits, income and assets tests) required for that pension under Australia's social security laws.
Australian pensions are means-tested. For information about the current income and assets test limits, visit the Department of Human Services website.
The Age Pension age for men and women is 65. The Age Pension age is gradually being increased to 67 beginning from July 2017 – see Department of Human Services website - Age Pension for details of Age Pension ages.
Australian working life residence is the period of Australian residence between age 16 and Age Pension age.
Australian pensions for people who are outside Australia are calculated differently to pensions for those who are inside Australia.
Australian pension for a person living in Australia
When a person living in Australia is granted a pension under the Agreement (because of lack of qualifying residence), the person receives the normal means-tested pension less the amount of any Spanish benefit they also receive.
The Spanish benefit is 'topped up' to the rate of Australian pension they would get if they did not receive any Spanish benefit.
Once a person qualifies for an Australian pension in his or her own right (without needing the Agreement) any Spanish benefit is treated as income in the normal way.
Australian pension for a person not living in Australia
The rate of Australian pension payable outside Australia is affected by two things:
- length of Australian residence during working life; and
- the amount of income or assets in excess of specified limits.
Australian pensions paid overseas are paid at a proportional rate reflecting the person's working life residence in Australia. For claims made since 1 July 2014, a person with 35 years residence during 'working life' (between age 16 and Age Pension age) can be paid a full basic means-tested pension. A person with less than 35 years Australian working life residence, has his or her rate worked out on a proportional basis.
For example, a person with 20 years working life residence would receive 20/35ths (or 57%) of the basic means-tested pension rate; a person with 12 years working life residence would receive 12/35ths (or 34%).
The income and assets test also apply, so that a person with 35 years of working life residence in Australia could still receive only a part pension if their income or assets exceeded the threshold limits. For more information about the current income and assets limits, visit the Department of Human Services website.
Under the Agreement, when a pension is paid overseas a concessin may apply on the proportion of any contributory Spanish pension received which is counted as income for the income test. This also applies to pensions granted without the assistance of the Agreement.
Non-contributory Spanish pensions (generally only paid in Spain) are disregarded totally from the Australian income test.
Following are some examples of how the Agreement assists people living in Australia:
Mr Gracia is aged 65 and has lived in Australia for 6 years. Before moving to Australia he lived in Spain and paid contributions to the Spanish social insurance system for 35 years. He now wishes to claim an Australian Age Pension.
- Without the Agreement
He cannot get an Australian Age Pension because he has not lived in Australia for more than 10 years.
- With the Agreement
Mr Garcia can add his 6 years as an Australian resident to his 35 years of contributions in Spain so that he meets the minimum 10 years Australian residence required to qualify for an Australian Age Pension
Also, Centrelink would assist him in claiming any Spanish pension he may be entitled to.
Mr Gonzales has lived in Australia for 2 years and is now 65 years old. He has also lived in Spain for 4 years and contributed to the social insurance system while there. He wishes to claim an Australian Age Pension.
Mr Gonzales would not qualify for an Australian Age Pension because, even if he does add his periods of contributions in Spain to his period of Australian residency, he still will not have at least 10 years of Australian residence he needs to qualify for an Age Pension.
Following are some examples of how the Agreement assists people living in Spain:
Mr Mateos is aged 65 and has lived in Australia for 20 years during his working life. He is now living in Spain and is already receiving a Spanish benefit. He left Australia before reaching Age Pension age.
- Without the Agreement
Although he has more than 10 years required for Australian Age Pension, he would not qualify for payment as he is not an Australian resident and in Australia.
- With the Agreement
The Agreement's lodgement provisions allow Mr Mateos to claim an Australian pension even though he is a resident of Spain.
His rate of Australian pension would be proportionalised; 20/35ths of the basic means-tested rate would be paid.
The Instituto Nacional de Seguridad Social would assist him in claiming an Australian pension.
Mr Gomez is aged 65 living in Spain. He has 16 years of contributions to the Spanish social insurance system. He has also lived in Australia for 9 months.
- Without the Agreement
Mr Gomez would be entitled to a Spanish pension only. No Australian pension could be paid because he is not an Australian resident and in Australia.
- With the Agreement
No change. Mr Gomez would still receive a Spanish pension, but would not be entitled to an Australian pension because under the Agreement the minimum period of Australian working life residence is one year (of which at least six months must be continuous).
For more information on claim procedures and payments:
- Contact Centrelink International Services.
- Visit your local Centrelink Customer Service Centre.
- Department of Human Services Publications - Australia's International Social Security Agreements Factsheets
For more information on how the Agreement will assist seconded workers, contact the Australian Taxation Office.